Financial Performance - Total revenue for 2023 reached RMB 113,470 million, representing a year-on-year increase of 20.5% from RMB 94,183 million in 2022[13] - Gross profit for 2023 was RMB 57,391 million, accounting for 50.6% of total revenue, up from 44.7% in 2022[13] - Operating profit for 2023 was RMB 6,431 million, a significant recovery from an operating loss of RMB 12,558 million in 2022[13] - Adjusted EBITDA for 2023 was RMB 17,424 million, reflecting an impressive increase of 860.0% compared to RMB 1,815 million in 2022[13] - The company reported a net profit of RMB 6,399 million for 2023, compared to a net loss of RMB 13,689 million in 2022[13] - The adjusted net profit for 2023 was RMB 10,271 million, a significant improvement from a loss of RMB 5,751 million in the previous year[13] - The operating profit margin improved to 5.7% in 2023 from a negative margin of 13.3% in 2022[13] Revenue Breakdown - Domestic revenue accounted for RMB 111,186 million, while overseas revenue was RMB 2,284 million, indicating a strong focus on the domestic market[16] - E-commerce gross merchandise volume (GMV) for 2023 was RMB 1,184.37 billion, up from RMB 901.16 billion in 2022, reflecting a growth of 31.5%[20] - Average revenue per daily active user (ARPU) increased to RMB 158.7 in 2023, compared to RMB 137.9 in 2022, indicating a growth of 15.8%[20] - Kuaishou's online marketing service revenue grew by 20.6% year-on-year to RMB 18.2 billion in Q4 2023, driven by refined operations and algorithm optimization[31] - E-commerce gross merchandise volume (GMV) in Q4 2023 reached RMB 403.9 billion, representing a year-on-year growth rate of 29.3%[34] User Engagement - Average monthly active users reached a record high of 700.4 million in Q4 2023, with a year-on-year increase of 10.5%[27] - In Q4 2023, Kuaishou's average daily active users reached 382.5 million, a year-on-year increase of 4.5%, while monthly active users reached 700.4 million, up 9.4%[29] - The average daily usage time per active user in Q4 2023 was 124.5 minutes, indicating strong user engagement[29] - Daily average paid users for short dramas increased more than threefold year-on-year in Q4 2023, indicating a surge in user willingness to pay[29] Cost and Expenses - Total sales cost increased by 7.7% from RMB 52,052 million in 2022 to RMB 56,079 million in 2023, mainly due to rising revenue sharing costs[53] - Research and development expenses decreased by 10.5% from RMB 13,800 million in 2022 to RMB 12,300 million in 2023[57] - Sales and marketing expenses decreased by 1.7% from RMB 37,100 million in 2022 to RMB 36,500 million in 2023, reflecting more effective user acquisition and retention spending[56] Cash Flow and Investments - The net cash generated from operating activities in 2023 was RMB 20.8 billion, significantly higher than RMB 795 million in 2022[117] - The net cash used in investing activities for the year ended December 31, 2023, was RMB 19.9 billion, mainly due to net investments in financial assets measured at fair value of RMB 13.2 billion, purchases of property, equipment, and intangible assets of RMB 4.9 billion, and net investments in time deposits with maturities over three months of RMB 2.4 billion[120] - The net cash used in financing activities for the year ended December 31, 2023, was RMB 1.4 billion, primarily due to lease principal and interest payments of RMB 3.5 billion, share repurchases of RMB 1.3 billion, and net proceeds from note arrangements of RMB 3.2 billion[120] Strategic Initiatives - The company plans to continue expanding its market presence and investing in new technologies to drive future growth[16] - Kuaishou Technology aims to enhance user engagement and retention through innovative product offerings and strategic partnerships[16] - The company plans to enhance infrastructure, algorithms, content, and business scenarios to prepare for potential economic recovery and faster growth[42] - The company aims to enhance its technological capabilities and expand its ecosystem and monetization abilities in the future[137] Shareholder and Governance - The company does not plan to declare a final dividend for the reporting period, considering its financial condition and current economic environment[134] - The company has adopted corporate governance principles and codes to maintain high standards of governance[152] - The board of directors will undergo re-election in 2024, with key executives eligible for reappointment, ensuring continuity in leadership[162] Leadership and Management - The company has seen significant leadership changes, including the resignation of Chen Dingjia as CTO effective January 18, 2023[178] - The management team is composed of experienced professionals with backgrounds in various sectors, contributing to the company's strategic direction[178] - The company is focused on strategic planning and major business decisions, with a strong emphasis on corporate governance[171] Employment and Workforce - The company has 26,418 full-time employees as of December 31, 2023, primarily located in major cities in China[139] - The company emphasizes strict recruitment standards to attract and retain qualified personnel[141] Environmental and Social Responsibility - The company has not faced significant environmental risks or penalties during the reporting period[138] - The company made charitable donations of approximately RMB 27 million during the reporting period[149]

Core Viewpoint - The article highlights the journey of Deng Yan, a rural creator who transitioned from urban life to becoming a successful agricultural influencer on Kuaishou, emphasizing the importance of agricultural knowledge dissemination and e-commerce in rural development [1][2][3]. Group 1: Personal Journey - Deng Yan, born in 1987, initially pursued a career in urban landscaping after graduating from Inner Mongolia Agricultural University, but later returned to her hometown to support her family's agricultural business [2][3]. - After a period of adjustment and emotional struggle, Deng Yan focused on creating effective planting solutions for farmers and established a local agricultural supply store [3][4]. Group 2: Agricultural Knowledge Sharing - Since 2013, Deng Yan's agricultural supply store has served thousands of farmers, revealing a significant gap in agricultural knowledge among them [4][5]. - In 2018, she began sharing agricultural knowledge on Kuaishou, leveraging the platform's popularity among rural users to reach a wider audience [5][6]. Group 3: E-commerce Development - Deng Yan's sales increased significantly after she started using short videos and live streaming to educate farmers about agricultural techniques and products, leading to a doubling of her store's sales in 2019 [5][6]. - By establishing an online store on Kuaishou, she has sold over 190,000 agricultural products, with online sales accounting for 90% of her total revenue [6][7]. Group 4: Future Aspirations - Deng Yan plans to recruit experienced agricultural dealers to help them utilize Kuaishou effectively, aiming to expand the reach of agricultural knowledge and products [7]. - She expressed her excitement about the future, stating her commitment to continue growing her influence in the agricultural sector through Kuaishou [7].

Investment Rating - The report maintains a "Buy" rating for the company with a target price of 81.47 HKD, based on a 2.5x PS for 2024 [5][6]. Core Insights - The company has entered a comprehensive profit era, achieving a revenue of 113.47 billion CNY in FY2023, a year-on-year increase of 20.5%, and an adjusted profit of 10.27 billion CNY, recovering from a loss of 5.75 billion CNY in 2022 [2][4]. - The user base of the company's application continues to grow, with average monthly active users surpassing 700 million in Q4 2023, reflecting a 9.4% year-on-year increase [3]. - The company's various business segments showed strong performance, with online marketing services revenue growing by 20.6% year-on-year in Q4 2023, and e-commerce gross merchandise volume increasing by 29.3% year-on-year [4]. Financial Performance Summary - Revenue for 2023 was 113.47 billion CNY, with a growth rate of 20.48% compared to 2022 [6]. - Adjusted net profit for 2023 was 10.27 billion CNY, marking a significant recovery from a loss in the previous year [4]. - The company forecasts revenues of 128.72 billion CNY, 143.32 billion CNY, and 153.91 billion CNY for 2024, 2025, and 2026, respectively, with corresponding growth rates of 13.4%, 11.3%, and 7.4% [5][6].

Investment Rating - The report maintains a "Buy" rating for Kuaishou-W (01024.HK) [3] Core Views - Kuaishou's Q4 2023 results exceeded market expectations, with revenue reaching 32.6 billion yuan, a year-on-year increase of 15%. The adjusted net profit was 4.36 billion yuan, with an adjusted net profit margin of 13.4%, up 13.6 percentage points year-on-year [1][2] - The company is experiencing strong growth in its e-commerce segment, with Q4 GMV reaching 403.9 billion yuan, a year-on-year increase of 29%. The average monthly number of buyers reached 130 million, with a penetration rate of 18.6% [1] - Kuaishou's advertising revenue grew by 21% year-on-year in Q4, accounting for 56% of total revenue, driven by both internal and external marketing efforts [1][2] Financial Performance Summary - For the full year 2023, Kuaishou achieved total revenue of 113.5 billion yuan, a year-on-year increase of 20.5%, and an adjusted net profit of 10.27 billion yuan, marking a return to profitability [1][2] - The report forecasts revenue growth for 2024-2026 at 11%, 15%, and 11% respectively, with adjusted net profits expected to grow significantly [2][9] - Key financial metrics include a projected adjusted net profit of 16.16 billion yuan in 2024, with a net profit margin of 12.9% [9][10] User Engagement and Growth - Kuaishou's daily active users (DAU) and monthly active users (MAU) reached 382.5 million and 700.4 million respectively in Q4 2023, with year-on-year growth of 4.5% and 9.4% [1] - The average daily usage time per active user was 124.5 minutes, indicating strong user engagement [1] E-commerce and Advertising Segments - The e-commerce segment is expected to maintain high growth rates, supported by an expanding supply side and diverse product offerings [1][2] - The advertising segment is benefiting from a robust internal marketing strategy and a recovering external market, with significant growth in active marketing clients [1][2] AI and Innovation - Kuaishou is advancing its AI capabilities, with plans to develop a large language model and enhance its multi-modal applications, which are expected to improve user experience and operational efficiency [2]

Investment Rating - The report gives a "Recommend" rating for Kuaishou-W (01024.HK) with a target price of HKD 62.92, compared to the current price of HKD 49.65 [1] Core Views - Kuaishou has entered a new chapter of comprehensive profitability, with its advertising and other businesses growing rapidly while the once-pillar live streaming business is shrinking, expected to continue declining in the future [1] - The competitive landscape has eased, with Kuaishou repeatedly validating the advantages of its traffic genes in competition with Douyin and WeChat Video Accounts [1] - Kuaishou's two major businesses, advertising and e-commerce, have differentiated paths and entered a stable growth track, with future emphasis on synergistic development [1] Business Overview - Kuaishou's main revenue structure consists of live streaming, advertising, and e-commerce. The live streaming business, once the main revenue contributor, is gradually shrinking due to regulatory and strategic adjustments, while advertising and e-commerce are growing [11] - Advertising revenue is driven by internal circulation, closely linked to e-commerce GMV, while e-commerce focuses on strengthening the linkage between content and shelf fields to improve MAC penetration [11] - The company's revenue structure reflects its exploration and adjustment of commercialization, with advertising as the mainstay and e-commerce still in the growth phase [11] Financial Performance - Kuaishou achieved its first full-year profit in 2023 since its IPO, with adjusted net profit reaching RMB 10.27 billion [15] - The company's gross margin, net margin, and adjusted net margin have been steadily increasing since Q1 2022, reaching 53.1%, 11.1%, and 13.4% respectively in Q4 2023 [16] - Sales expenses have decreased significantly, with sales/ R&D/ management expense ratios dropping to 31%/10%/2% in Q4 2023, down 3.1/2.1/1.3 percentage points year-on-year [17] Competitive Landscape - The competitive landscape has eased, with the MAU gap between Kuaishou and Douyin remaining stable and user overlap decreasing, indicating a more relaxed competitive environment [22] - WeChat Video Accounts, while showing strong growth, are unlikely to disrupt the top 2 positions of Douyin and Kuaishou in the short term due to differences in user profiles and industry growth slowing down [22] - Kuaishou has repeatedly validated its traffic gene advantages in competition, gradually emphasizing the concept of "public domain traffic + private domain operation repurchase" [22] Advertising Business - Kuaishou's advertising business is divided into external and internal circulation. Internal circulation advertising, which accounts for nearly half of advertising revenue, is closely linked to e-commerce GMV and is expected to continue deepening its synergy with e-commerce [48] - External circulation advertising is more influenced by macro factors and advertiser spending willingness, with strategies focusing on increasing ad load and eCPM for long-term revenue growth [50] E-commerce Business - Kuaishou's e-commerce business, recorded under "other services," achieved a GMV of RMB 1.18 trillion in 2023, a 31% year-on-year increase, with a stable commission monetization rate of around 1.19% [53] - The e-commerce strategy focuses on three key areas: public domain traffic, general shelves, and small and medium-sized brands, aiming to build a "trust e-commerce" model through content and shelf integration [56] - Kuaishou's e-commerce business is expected to be the main driver of growth in 2024-2026, with GMV growth rates of 25%/22%/15% and other service revenue growth rates of 28%/22%/15% [63] Valuation and Forecast - The report forecasts Kuaishou's revenue for 2024-2026 to be RMB 127.8/143.2/153.8 billion, with year-on-year growth of 12%/12%/7%, and adjusted net profit of RMB 16.1/21.4/25.5 billion, with year-on-year growth of 57%/33%/19% [62] - Using the SOTP valuation method, the target market value for 2024 is HKD 273.3 billion, corresponding to a target price of HKD 62.92, with a PE ratio of 12/9/8 times for 2024-2026 [62]

Market Trends and Strategic Shifts - The concept of "new line markets" has emerged, redefining the consumer potential in third-tier and below cities, with 40% of county households earning over RMB 100,000 annually and a savings rate of 38% [2] - By 2030, China's personal consumption is projected to grow to RMB 65.3 trillion, with over 66% of growth coming from third-tier and below cities [2] - Brands are increasingly targeting these "new line markets" as a strategic growth opportunity due to saturated first-tier city markets and rising customer acquisition costs [2] Kuaishou's User Base and Growth - Kuaishou's average monthly active users (MAUs) grew by 9.4% YoY in Q4 2023, surpassing 700 million for the first time [3] - 60.9% of Kuaishou's users are from third-tier and below cities, with Q4 2023 e-commerce users spending over RMB 1,000 per month on average [3] - During the 2024 CNY Spring Festival marketing campaign, the number of brands on Kuaishou increased by 121%, and Q4 2023 brand advertising revenue grew by 80% [2][4] Financial Performance and Revenue Streams - Kuaishou's online marketing service revenue reached RMB 60.3 billion in 2023, with Q4 revenue hitting a record high of RMB 18.2 billion, a 20.6% YoY increase [4] - Brand advertising revenue in Q4 2023 grew by over 80% YoY, driven by strong performance in industries like automotive and fast-moving consumer goods (FMCG) [4] - Search marketing service revenue in Q4 2023 nearly doubled YoY, with e-commerce GMV surpassing RMB 1.18 trillion for the full year [5] E-commerce and Marketing Innovations - Kuaishou's live-streaming e-commerce model, supported by its strong fan culture, has become a key driver of its commercial success [6] - The launch of the "Magnet Golden Bull" platform in May 2021 has provided tailored marketing services for e-commerce merchants, with the "Full Store ROI" strategy driving over 30% GMV growth for premium merchants [6] - Kuaishou's local life business has seen rapid growth, with merchants using the Magnet Local Push PC version experiencing a 194% increase in monthly GMV [7] Content and AI-Driven Commercialization - Kuaishou's short drama ecosystem has seen significant growth, with 94 million heavy users watching over 10 episodes daily in Q4 2023, a 50% YoY increase [8] - AI technologies like the "Pangu" video AIGC product have reduced customer acquisition costs by 62%, while the "Nuwa" digital human AIGC product supports over 2,200 digital humans broadcasting 24/7 [9][10] - AI-powered tools, such as intelligent customer service and private messaging, have improved conversion rates, with automated campaigns showing a 196% increase in ARPU compared to traditional methods [11] Strategic Vision and Future Outlook - Kuaishou's AI strategy, including its 175 billion-parameter language model, positions it as a leader in AI commercialization, with applications across content production, distribution, and conversion [9][10] - The company is transforming into a full-chain business platform, integrating AI and smart technologies to provide end-to-end solutions for brands and merchants [11][12] - Kuaishou's focus on "new line markets" and AI-driven innovations continues to unlock new growth opportunities, solidifying its role as a key player in the evolving digital economy [12]

Investment Rating - The report maintains a "Buy" rating for the company with a target price of 61.28 HKD per share, based on a 15x PE valuation for 2024 [2][12][13]. Core Insights - The company achieved a net profit of 10.3 billion CNY in 2023, marking a turnaround from losses, with expectations for continued profitability in 2024 [1][2]. - The e-commerce segment is projected to maintain a growth rate of over 25% year-on-year in 2024, driven by the expansion of product offerings and user engagement [1][2]. - Advertising revenue grew by 20.6% year-on-year in Q4 2023, with expectations for a 26% growth in Q1 2024, supported by strong internal marketing initiatives [1][2]. User Growth and Engagement - Daily Active Users (DAU) increased by 4.5% year-on-year to 383 million, while Monthly Active Users (MAU) rose by 9.4% to 700 million, reaching a historical high [1]. - The average daily usage time per user was 124.5 minutes, despite a 7% year-on-year decline [1]. - The number of users utilizing the search function on the platform grew by over 16% year-on-year, indicating enhanced user engagement [1]. Financial Performance - The company reported a total revenue of 182 billion CNY in Q4 2023, with advertising accounting for 55.9% of total revenue [1]. - Adjusted net profit for Q4 2023 was 43.62 billion CNY, exceeding Bloomberg consensus estimates [1][2]. - The gross margin improved to 53.1% in Q4 2023, reflecting a shift towards higher-margin advertising and e-commerce businesses [1]. E-commerce and Advertising Growth - The e-commerce Gross Merchandise Volume (GMV) reached 403.9 billion CNY in Q4 2023, representing a year-on-year growth of 29.3% [1]. - The penetration rate of monthly paying users in the e-commerce segment increased to 18.6%, up 2 percentage points year-on-year [1]. - Internal advertising initiatives significantly reduced the cost of customer acquisition, contributing to robust revenue growth [1]. Future Projections - The company expects to achieve an average DAU of 400 million in the second half of 2024 [1]. - Adjusted net profit forecasts for 2024 and 2025 are set at 161.23 billion CNY and 225.35 billion CNY, respectively [2][11]. - Revenue projections for 2024 are adjusted to 127.86 billion CNY, reflecting a slight decrease from previous estimates due to strategic adjustments in the live-streaming business [7][11].

Investment Rating - The investment rating for the company is "Buy" (maintained) [10][19]. Core Views - The company reported a revenue of 113.47 billion RMB for 2023, representing a year-over-year increase of 20.5%. The operating profit was 6.43 billion RMB, and the net profit was 6.40 billion RMB, with adjusted profit at 10.27 billion RMB [6][10]. - The company has entered a profitable phase, with significant growth in user engagement and revenue streams, particularly in e-commerce and advertising [7][8]. Summary by Sections Revenue and Profitability - The company achieved a revenue of 113.47 billion RMB in 2023, with a year-over-year growth of 20.5%. The operating profit was 6.43 billion RMB, marking a turnaround from a loss of 12.6 billion RMB in 2022 [6][8]. - The gross profit for 2023 was 57.39 billion RMB, up 36.2% from 42.13 billion RMB in 2022, resulting in a gross margin of 50.6%, an increase of 5.9 percentage points [8][10]. User Growth and Engagement - Monthly active users reached 700 million in Q4 2023, with daily active users averaging 382.5 million, reflecting a year-over-year increase of 4.5% [7]. - The average daily usage time per user was 124.5 minutes, indicating strong user engagement [7]. Revenue Breakdown - Online marketing services generated 60.30 billion RMB in revenue, a year-over-year increase of 22.97%. The number of active marketing clients grew significantly, with Q4 revenue reaching 18.2 billion RMB [9]. - E-commerce revenue was 39.05 billion RMB, up 10.4% from the previous year, driven by an increase in active paying users and merchants [9]. - The overseas business reported a revenue of 847 million RMB in Q4 2023, nearly doubling year-over-year, with a significant reduction in operating losses [9]. Future Projections - Revenue projections for 2024-2026 are set at 128.36 billion RMB (up 13.12%), 141.48 billion RMB (up 10.22%), and 157.92 billion RMB (up 11.62%), respectively. Net profit is expected to reach 11.99 billion RMB, 17.11 billion RMB, and 22.04 billion RMB in the same period [10][13].

2024 年 03 月 28 日 公司研究 评级：买入 (维持 ) 研究所： [Table_Title] 商业化潜能持续释放， 大模型赋能经营全链 AI 证券分析师： 陈梦竹 S0350521090003 chenmz@ghzq.com.cn 证券分析师： 尹芮 S0350522110001 路 yinr@ghzq.com.cn ——快手 （ ） 磁力大会点评 -W 1024.HK 2024 最近一年走势 投资要点：  3月26日，快手2024磁力大会将于山城重庆举行。作为行业内年 度营销盛会，本次磁力大会以「智能经营」为主题，从平台生态、 产品创新、行业机会等多维度，全面解读快手磁力引擎战略新方向 和各行业生意可持续增长新解法。  1、商业化&电商：据快手2024年磁力大会，在快手7亿用户群体 中，新线城市用户占比约60%，消费潜力有望释放，同时快手的商 业规模也在进一步提升。①2023年Q4电商用户人均月下单金额超 相对恒生指数表现 2024/03/26 过1000元。②2023年快手电商全年GMV规模突破1.18万亿，2023 表现 1M 3M 12M 年Q4本地生活GMV同比增长25倍，2023年 ...

Investment Rating - The report maintains a "Buy" rating for Kuaishou Technology with a target price of HK$72.00, reflecting a 12x P/E for 2025 [1][10]. Core Insights - Kuaishou's e-commerce and advertising businesses are expected to drive strong profit growth in 2024, with an anticipated 67% year-on-year increase in adjusted net profit [1][2]. - The company reported a 15% year-on-year revenue growth in Q4 2023, reaching RMB 32.6 billion, which met expectations [1][7]. - The adjusted net profit margin improved to 13.4% in Q4 2023, exceeding forecasts [2][7]. Summary by Sections Financial Performance - Q4 2023 revenue was RMB 32.6 billion, a 15% increase year-on-year, aligning with predictions [1][7]. - The adjusted net profit for Q4 2023 was RMB 4.36 billion, reflecting a 37% increase year-on-year [2][7]. - The gross profit margin improved from 51.7% in Q3 2023 to 53.1% in Q4 2023 [2][7]. User Metrics - Daily active users (DAUs) grew by 4% year-on-year to 383 million in Q4 2023, with a target of reaching 400 million DAUs in the second half of 2024 [1][2]. - E-commerce gross merchandise volume (GMV) increased by 29% year-on-year to RMB 404 billion in Q4 2023, driven by a rise in monthly paying users [1][2]. Revenue Streams - E-commerce GMV is projected to grow by 25% year-on-year in 2024, with shelf e-commerce expected to maintain high growth rates [2][8]. - Online marketing revenue increased by 21% year-on-year, supported by strong growth in both internal and external advertising [1][2]. Profitability Outlook - The report forecasts total revenue growth of 12% for 2024, with adjusted net profit expected to reach RMB 17.2 billion, corresponding to a net profit margin of 13.6% [2][8]. - The adjusted net profit margin is projected to remain stable, benefiting from improved revenue mix and cost efficiency [2][8]. Valuation - The target price of HK$72.00 corresponds to a 12x P/E ratio for 2025, factoring in the company's net cash position of RMB 47.9 billion [10][11]. - The report slightly adjusted revenue forecasts for 2024-2025 down by 2% to reflect changes in live-streaming revenue expectations [2][8].